How Can the Fed Reduce a Continuing Inflation

question 119

Multiple Choice

How can the Fed reduce a continuing inflation?

• A) By slowing the continuing downward shift of the aggregate supply curve
• B) By increasing the money supply
• C) By slowing the continuing leftward shift of the aggregate demand curve
• D) By decreasing the required reserve ratio
• E) By slowing the continuing rightward shift of the aggregate demand curve.

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Definitions:

Cash Account

An account that records cash transactions both received and expended, reflecting the cash position of a business at any given time.

Raw Material

Raw material refers to the basic, unprocessed inputs used in the production of goods and services; they are the essential components required in the manufacturing process.

Standard Costs

Predetermined costs for products or services, used as benchmarks to measure actual production costs.

Cash Account

An account that reflects the amount of cash a company has on hand, which includes currencies, checks, and balances in bank accounts.